Organ cultured rat liver explants were treated with 20 micrograms/ml of N-2-Fluorenylacetamide (2FAA). The explants developed nodular aggregates of hypertrophic liver cells within 2-3 weeks. Further treatment with 2-FAA was associated with the appearance of morphologically transformed cells with high mitotic index which replaced the explants within 7 weeks. These cells presented occasional intercellular canaliculi with microvilli projections. Biological behavior of transformed liver cells after in vivo implantation is currently being studied.